HANSARD

Printed and Published by Nova Scotia Hansard Reporting Services

ECONOMIC DEVELOPMENT COMMITTEE

Ms. Pam Birdsall (Chairman)

Ms. Vicki Conrad

Mr. Brian Skabar

Mr. Jim Boudreau

Ms. Lenore Zann

Hon. Keith Colwell

Mr. Andrew Younger

Hon. Christopher d'Entremont

Mr. Keith Bain

[Ms. Vicki Conrad was replaced by Ms. Becky Kent.]

[Ms. Lenore Zann was replaced by Mr. Maurice Smith.]

[Mr. Andrew Younger was replaced by Mr. Harold Theriault.]

In Attendance:

Ms. Jana Hodgson

Legislative Committee Clerk

WITNESSES

Department of Economic and Rural Development

Mr. Neal Conrad

Executive Director, Community and Rural Development

Cumberland Regional Economic Development Association

Ms. Rhonda Kelly

Executive Director

HALIFAX, TUESDAY, MARCH 9, 2010

STANDING COMMITTEE ON ECONOMIC DEVELOPMENT

9:00 A.M.

CHAIRMAN

Ms. Pam Birdsall

MADAM CHAIRMAN: We're here for the Standing Committee on Economic Development and we welcome our guests this morning. We'll be talking about the status of projects in work undertaken by the regional development authorities.

I'll introduce our guests after we go around the table, if we could have the committee members identify themselves and the area they represent.

[The committee members introduced themselves.]

MADAM CHAIRMAN: What I will do is introduce our guests and then we'll move ahead with our presentations. This morning we have with us Mr. Neal Conrad, who is the Executive Director of Community and Rural Development, and Ms. Rhonda Kelly, who is the executive director. Neal will start with a presentation and then we'll go into his PowerPoint presentation and then we'll follow with questions. The floor is all yours.

MR. NEAL CONRAD: Thank you very much, Madam Chairman. It is, indeed, a pleasure for me to be here this morning to speak about the work that we do in Community and Rural Development, with a highlight and focus on the activities of the regional development authorities around the province. It has been a very challenging year for many and we're optimistic about the outcomes of the work and the funding commitments that contribute to building sustainable and strong communities across Nova Scotia. The regional development authorities, we consider them to be a core delivery mechanism in meeting those objectives.

Our work is critical in fulfilling the province's mandate, through its economic growth strategy, while aligning with government's priorities and the province's Community Development Policy. The division that I represent, Community and Rural Development, we assist regional areas of the province and rural communities through local planning, community entrepreneurship, infrastructure to promote the creation of business investment and jobs, through locally-driven initiatives. I think that's the underpinning of regional development authorities.

We recognize quite clearly the role that local initiatives play in both driving, creating and sustaining economic development based on community goals and objectives around the province. I'm sure you'll agree with us that community-led initiatives are key to community survival, while emphasizing necessary partnerships, collaboration and a shared vision to achieve a common goal. It's rewarding to see communities thrive as a result of the work that's undertaken.

We work with other provincial government departments, agencies and other orders of government to fulfill this mandate. The more friends you have who understand your goals and objectives, the more likely it is that you're going to have success.

Our support network includes the regional development authorities, of course, but it also includes a number of other organizations with a mandate to support locally-driven economic development. They include the Nova Scotia Co-operative Council, the Black Business Initiative and Le Conseil de développement économique de la Nouvelle-Écosse, CDÉNÉ as we call them. Core funding through the department is provided annually to support the important programs delivered by these organizations.

The 13 RDAs across the province are multiple organizations that comprise the community economic development support network. Their work and leadership is, in fact, vital to economic development and growth to all regions of the province. They not only help to ensure sustainable communities, but they help to build strong businesses as well.

RDAs are governed by a community-based board of directors with representation from municipal government, the business community and the community at large. In addition, staff from our department sit on all boards in an advisory capacity along with representatives of the Atlantic Canada Opportunities Agency or Enterprise Cape Breton Corporation, as appropriate. These organizations are funded by all three levels of government. This funding model is a unique economic development delivery model and Nova Scotia is viewed by many as a leader across Canada, through the adoption of this model.

We're currently in the second year of implementation of performance-based funding for all RDAs and all RDAs must incorporate under the Regional Community Development Act by April 1, 2010. As a progressive province in community economic development, we

took on a task three years ago with KPMG as our consultant, to move forward with this new funding model which rewards RDAs based on their performance. Up until this time, regardless of how an RDA was performing, they were all eligible to receive the same amount of annual funding.

To ensure their accountability, RDAs are required to complete five-year regional development strategies and to submit annual business plans to the department for review and approval. In addition, our department and funding partners conduct formal mid-year performance evaluations, we require annual audited financial statements, third-party performance-based evaluations, and under a new requirement all RDAs must be ISO registered.

The adoption of this model shows the strength in the RDA concept and confidence that they can perform at a higher level. One characteristic that has been consistent with RDAs from their creation has been one of continued improvement, evolution, accountability and performance. Following my presentation, Rhonda Kelly, sitting beside me here, will demonstrate how the RDA measures its performance and reports specifically in its region, I think it will be very instructive.

I want to emphasize that community-led economic development enables local groups and volunteers to develop initiatives to make communities more economically and socially viable. It's not a question of one or the other, economic or social, it really is an understanding that there must be an integrated approach to growing communities and sustaining communities in the province. The trick often is, where do you find the balance between the two?

Our department supports communities and important projects and initiatives outside of the core funding for the RDAs in two specific ways. We have two specific programs, an annual budget of approximately $2 million, about $1 million in each, that actually is to be applied toward the implementation of activities that have been identified in the region as being critical to the economic stability and growth of those regions. Our strategic funding initiatives and community development funds are those two programs and they help to ensure economic growth and sustainable communities for Nova Scotia, while building on their assets and strengths.

In 2008-09, which is the last complete fiscal year, across all four regions of the province in that year nearly $2.7 million was committed to funds, about 150 projects I would guess would have been undertaken through those programs and that would have included funding for regional planning. They leverage just over $11 million in additional funding, that's not a bad return on investment from our point of view, approximately $4 levered for every $1 which was invested through provincial sources.

The work that is undertaken crosses a number of sectors and community requirements. For instance, we recently announced funding, in partnership with the Government of Canada, to upgrade facilities in Wentworth in preparation for the 2011 Winter Games - again, a project that was identified through the strategic planning work undertaken in Cumberland County for which we had the opportunity to make an investment, along with many other government partners, to actually see that activity being completed.

We also announced funding earlier this year for Annapolis Royal, to help the area become a hub for leisure boaters and a busier tourist town as it proceeds with a wharf and harbourfront improvements. This project could see a major wharf extension, new marina and harbourfront improvements, while injecting an anticipated $2.5 million into the economy in Annapolis and Digby annually, while creating new jobs. This project was actually undertaken by the Town of Annapolis Royal; however, it was identified in the strategic planning work that was done by the Annapolis Digby Economic Development Agency.

[9:15 a.m.]

So although many times there will not be a direct correlation between our funding and an RDA, certainly the RDA would have been involved in identifying it as a priority and also identifying who the appropriate local lead should be to undertake that activity within their jurisdictions and that would be a case in that. This is really a great example of a project like that.

The RDAs also are instrumental in delivering programs like the Business Retention & Expansion program, effectively known as BRE. I know we slip into acronyms from time to time, but you'll hear discussions about BRE from time to time; that's what it really is. BRE really assists Nova Scotia businesses to develop the necessary qualities and skills for economic growth and survival. In a program like that, which is headed through the Nova Scotia Association of RDAs and now is available to businesses across the entire province for about a year now, its focus really is not on attracting business to the province. It is about retaining and expanding existing businesses that actually exist in Nova Scotia, and really focusing primarily at the small end because that's what makes our Nova Scotia business economy work.

Because of that program, the department successfully launched the Nova Scotia Business Development Program, which is a consulting assistance program which works directly with businesses either to identify a problem or take the corrective measures to fix the problem. Through programs like this and like our Student Employment Program, we're supporting the need for strong, healthy businesses and a skilled workforce to help ensure the province has the right people in place for a prosperous Nova Scotia.

Our new Private Sector Research and Development Co-operative Employment Program stimulates private-sector innovation and provides on-the-job research and

development opportunities for our university students. Although those two programs I have specifically mentioned are not delivered by the regional development authority, the assessment evaluation and the behind-the-scenes work that's necessary to make these things work, the RDAs are, in fact, critical in our assessment of where those funds should be applied.

We will continue this kind of necessary work in communities across the province, as well as supporting vital initiatives to ensure strong and sustainable communities. We'll continue to strive to make Nova Scotia one of the most connected jurisdictions in North America through the Broadband for Rural Nova Scotia initiative, which was actually piloted in one of our regional development authorities - Cumberland, actually, and Rhonda is here today - but it was actually piloted through one of our regional development authorities.

Community access sites across the province in the RDAs have been very supportive in spreading the word and encouraging use of broadband and utilizing the services through our workshop sessions on preparing for a broadband future. By identifying and focusing on community assets, which is really what broadband will do, what the RDAs do consistently in partnership with all three orders of government, we believe we have set in place the foundations for a strong economic future for Nova Scotia.

The work is not done. Different parts of the province, in fact, have different challenges, expectations and needs. We believe that the best vehicle by which those needs can be identified, quantified, and the best organization to be held accountable for their success, is embedded in the RDA network. Not all regional development authorities in the province are functioning at the same level and that is evidenced through the mid-year evaluation that we, in fact, do. But we believe the base is there and we will continue to work with our partners to ensure that community expectations can, in fact, be met in a reasonable way.

I'd like to quickly go through a slide deck presentation which will deal with some more of the specifics and then I'll turn the floor over to Rhonda for a few comments from her and then we'll get into the Q & A's.

MADAM CHAIRMAN: Thank you.

MR. NEAL CONRAD: What I'd really like to quickly talk about and I've covered some of these comments in the text, I really want to talk about the context of RDAs, their mandate, support network, background, structure, financing and accountability. If we'd like to come back to any of those for more detail in the question period, we'd certainly be happy to do that.

Regional development authorities, as I said earlier, they are one of a multiple of organizations that comprise our community economic development support network, through

Economic and Rural Development. The support network includes principally four organizations, four kinds of work. We divide our work when we talk about communities. Really we consider communities in two ways; we consider the geographic community, which is where the regional development authorities actually work. Their work is defined by geography.

There are a number of organizations that have a provincial mandate to deal with a community, a cultural community for example, across the entire province. In our case it would include the BBI - the Black Business Initiative - which deals with economic development in the African Nova Scotian business community from one end of the province to the other, and dealing with CDÉNÉ, which is the economic development interests of the Acadian and francophone community from one end of the province to the other.

The fourth group that's in there really is the Nova Scotia Co-operative Council and they're in there because they represent a unique opportunity, based on the same principles of community involvement and community-directed activity that govern the other organizations as well. They are also responsible for the development of co-ops in the province and that brings the credit unions to the table as well, which represent community-accessed, locally-controlled finance.

The mandate of the RDAs specifically is to coordinate and assist regional communities in developing local planning and institutional capability, community entrepreneurship and the essential infrastructure that will promote the creation of business investment and jobs through locally-driven initiatives. This really speaks to the fact that one size does not fit all, that in fact there should be a local response mechanism that can respond to legitimate local needs that may differ slightly from one part of the province to the other.

The economic renewal areas that we currently work under were proclaimed in June 1994, so this is a long-standing initiative in this province. During that year multiple-year funding was secured through the Economic Diversification Agreement between the federal government and the province. The initial funding was administration and development of the core functions of an RDA were administered through a federal-provincial secretariat.

The Regional Community Development Act, provincial legislation, was proclaimed in December 1996 and a memorandum of understanding between the Province of Nova Scotia, through the Department of Economic Development and the Department of Community Services was signed with the Nova Scotia Association of RDAs in June 2004. We also have a memorandum of understanding with CDÉNÉ and with the Nova Scotia Co-operative Council.

The structure of regional development authorities is really that it's a community-based board of directors. Representatives from municipal government, the business community and the community at large would be on that board. Our staff sit on the board in

an advisory capacity, along with ACOA or ECBC. This model is unique in Canada. The municipal government appointees, however, do, in fact, vote. They are the local order of government to which the board is most directly accountable.

How are they funded? Up until two years ago, regardless of where you were in the province, you were eligible to receive the same amount of funding. It would be $150,000 from each order of government; a three-way matching formula. We worked with our colleagues at ACOA and Enterprise Cape Breton Corporation and the Nova Scotia Association of RDAs, with representation from the Union of Nova Scotia Municipalities and developed what we've called performance-based funding - a performance-based funding model for the province for the RDAs.

The current fiscal year, the 2009-10 fiscal year, was really a transition year into that new performance-based funding, and in 2010-11 it will become the way that we deliver. We've made some tweaks and some changes, but really what it does is it still is a three-way funding formula between federal, municipal and provincial. There's a base level of funding that has been established for each RDA. It is from each level of government, that would be $125,000.

There is a second level of funding which we say represents the local circumstance. We have taken a portion of our funding for RDAs and we divided between RDAs, based on the municipal, the agreed-upon gas tax revenue funding formula. It's not just population-based, it includes a number of other variables in that formula - households and highways and that kind of stuff. We chose to use that formula because it was a formula that was developed by the Union of Nova Scotia Municipalities and accepted by the province as a reasonable way to divide funding, based on local circumstances, so we've used that.

The third level of funding that is available is for those RDAs that, in fact, exceed expectations, as outlined in their business plan. So the maximum funding that any one regional development authority can receive from the three orders of government right now is $525,000 a year. There is a cap; if not that cap, there would be two large urban areas in the province which would take the majority of the funding. That would be HRM and Cape Breton County. So there is, in fact, a cap that has been agreed on by all parties and the funding remains split between three orders of government.

I think what is interesting to note is that although the split is nominally three ways,

many municipal units, in fact, have agreed to provide additional or supplemental funding to those regional development authorities. So across the portfolio, the federal and provincial government are each providing about 28 per cent of the funding, rather than 33.3 per cent. The difference is simply because municipal units have agreed that they wish to provide additional funding to their regional development authorities. Not every RDA is able to do that. Some stick with one-third, one-third, one-third funding, but in many cases there is additional funding coming from municipal sources.

There are also individual projects that are funded outside of that. I mentioned that in my remarks, that we do have a pool of funds, as do ACOA and Enterprise Cape Breton Corporation and any number of other federal and provincial government departments, that can be applied specifically to projects that have been identified. This model is, in fact, unique in Canada. There has been some interest in attempting to apply the performance-based funding. I believe the Nova Scotia Association of RDAs will be attending a function in Newfoundland and Labrador soon. The Newfoundland and Labrador Government is interested in adapting, to some degree, performance-based funding in the Province of Newfoundland and Labrador.

So how do we know that the work we're being paid for is good work and that it's being done? The accountability really is multiple-part accountability framework. Each RDA must complete a five-year regional development strategy. These strategies must be developed with broad-based community support. They cannot be developed by the RDA itself; there must be evidence of broad-based community support and support from an engagement of all sectors of the economy that make up that region. We would look for that.

They would operationalize that annually with a business plan. There are, in fact, formal, mid-year performance evaluations undertaken. What the RDAs have adopted is they use a federal Treasury Board standard reporting procedure that actually moves you beyond outputs and into outcomes. It actually drives you toward measurable results and I'm sure Rhonda will be able to enlighten us a little bit more specifically about how that works.

Our thinking with mid-year evaluations was that the business plan is fine but what we really want to do, and they are evaluated for consistency and content and to make sure that the objectives, as stated, are, in fact, measurable and real. Our belief in mid-year evaluations is that mid-year gives us the opportunity to not just talk about what it is that you plan to do but actually demonstrate what it is you have actually completed by mid-year. It also allows for mid-course adjustments to, in fact, be made if things are falling away or moving off.

There will often be instances where the economic situation in an area would require that the original business plan as presented cannot be followed. For example, a number of years ago when Greenbrier closed their plant at Trenton, it required the Pictou Regional Development Commission to do a mid-year adjustment to adjust their activity to deal with that closure. I think we need to recognize that and that is recognized during the mid-year evaluation.

[9:30 a.m.]

All RDAs are required to provide audited annual financial statements within 60 days of year end, done by qualified, independent auditors. The performance-based funding is being renewed and reviewed right now with KPMG. There will be a modification to what

we call the key performance indicators, the block of eight or so key areas that we've agreed that RDAs should work within. They're being adjusted now, and I believe the report from KPMG is now in final draft format and it will be discussed at the next RDA Association meeting.

There are, in fact, third-party performance evaluations which are done within each RDA, that they would undertake themselves. They range from every three to five years or so, there would be something that would be done.

Every RDA in the province is required to be ISO registered. We're the only jurisdiction, provincial or state in North America, that makes this kind of standard a requirement. This is a requirement that we were asked to put in place by the RDAs themselves, they were very much interested in that standard. There has been some discussion, of course, of why does this matter.

What ISO actually gives the RDA is the platform on which continuous improvement can, in fact, be based. It is an international standard that is recognized as such, so when the RDAs are contacted by or in contact with international agencies or Canadian agencies, to be able to clearly identify that they are ISO registered, it does set them apart and it gives them a credibility that is fundamental to the work that they do.

The current state in the province. There are 13 regional development authorities currently in the province. We're in the second year of performance-based funding. All RDAs, with the exception of GHP, meet the ISO standard. All RDAs are to be incorporated under the RDA Act by April 1^st and I've mentioned the key performance indicators as being under review.

All RDAs that are currently not under the Act, with the exception of one, have indicated to us that they intend to be compliant with the Act by April 1^st and we have received documentation to complete that requirement from two of the five that were outstanding and work is progressing on the others. We expect that we will have four of the five that currently were not compliant to meet that compliance requirement by April 1^st.

Just in terms of conclusions, I believe that RDAs have proven to be effective in meeting their mandate. Increased expectations, of course, continue to be placed on them from a wide variety of associated government departments and agencies. For example, the regional development authorities actually administer the community-identified portion of the Nova Scotia immigration program, with the Nova Scotia Office of Immigration.

Performance of individual groups vary, they include those that exceed expectations, those that are meeting expectations and those that require a targeted intervention. In the last round of evaluation there was one RDA that did, in fact, require a targeted intervention and

we're working with them to improve their performance. Five of the 13 RDAs met expectations and seven exceeded expectations.

We believe the fundamentals are in place, but we must continue to support and challenge their activities. Believe me, from the work that I see with the RDAs, they are open to that challenge, they welcome the opportunity to meet those challenges, and we've certainly looked forward to working with them. I believe that their challenge in the future is going to be, as they are recognized as being capable organizations with a great deal of capability, that increased pressure will be put on them to expand beyond their current mandate and that would, in my view, likely cause some problems around adequate resources to carry out their additional mandate.

That will be a challenge for each and every board of every RDA in the province, as well as organizations that are asking departments in particular, that are asking RDAs to carry on additional work merely assuming that because they already receive federal and provincial funding, that they are adequately resourced to carry out additional responsibilities or that the Department of Economic and Rural Development has the authority to tell an RDA what to do. We do not have that authority. The authority and the direction of an RDA lies with the individual board of directors of that organization. Our job, of course, is to advise and to counsel and to direct, but not dictate.

So that's it for my presentation and I'll ask Rhonda Kelly to make some comments about specific functioning of her organization in Cumberland County.

MADAM CHAIRMAN: Thank you. Ms. Kelly.

MS. RHONDA KELLY: Good morning, is my voice fine? It's a little loud, so bear with me. Just a little bit of background on who I am. I'm the executive director of the Cumberland Regional Economic Development Association - that's the Cumberland RDA in the northern part of the province, Mr. Skabar's territory.

MR. BRIAN SKABAR: We're across-the-street neighbours.

MS. KELLY: We are, right-across-the-street neighbours. In terms of my background, I've been with the regional development authority since probably about three months after it was formed in 1995. We are one of the older RDAs, and apparently I'm one of the more seasoned people to be involved. I didn't know that until a couple of weeks ago, but it's nice to know that.

It's important that you understand a little bit about our organization - how we're structured and what we do - to understand the accountability framework that we deal with. We are one of the RDAs that adamantly believes in performance-based funding; we've been requesting it for over 10 years. We've been involved in the committee activity of the

association that helped put that together. In fact, we're probably a little obsessive about evaluation and activities surrounding that and part of that's the nature of our board of directors.

We have a 15-member board of directors comprised of three representatives from each of the five municipal units in Cumberland County. In order of size, that would be the Municipality of the County of Cumberland, the Town of Amherst, the Town of Springhill, the Town of Oxford and the Town of Parrsboro. In terms of who actually sits on the board, there is one elected official from each of the five municipal units and then two community appointed, ideally one from the business community and one from the not-for-profit or public side. In the majority of cases, the municipal unit actually advertises for those positions, requires resumés be sent in and does interviews for those positions to make sure that they find the best person possible to fill them.

Within the board of directors, it is not a board of directors that once you get placed on it you become chair and you get to stay there forever. There are actually terms of engagement for any board member to participate and the maximum amount of years any individual can serve as chair within our organization is three years. Again, that's to build capacity within the community to make sure that you're always getting new and good ideas around the table and you don't - forgive the term - fall into the cliché of being the old boys' club, which obviously I'm not quite part of that club.

In terms of our operation, we are one of those RDAs whose annual budget operationally exceeds the one-third, one-third contribution. This year our budget would exceed $650,000, based on performance-based funding and exceeding expectations last year. Only $320,000 of that would actually come from the provincial and federal governments, the rest is primarily municipal.

We have exceptional municipal units. We've been relatively successful over the years and a good portion of that reason is because one, a very innovative board of directors and an engaged board of directors in all aspects of the organization, and full support of all five municipal units in terms of understanding what we do. It's all about relationship building in our organization. We don't show up at our municipal units once a year going, okay, we're here for the money. It's about understanding what the municipal units' priorities are and the communities' priorities and the industries' priorities within the region, and customizing our activity to make the most of those opportunities.

So I talked a little bit about the organizational structure. Our core operations actually comprise of 10 staff members: six development field officers; myself; a full-time office manager; a full-time financial officer, because beyond our core operations in any given year we'll handle several million dollars worth of project activity; and a receptionist, because we're also one of those regional development authorities - and a lot of us are - that is co-located with other partners who do economic development-type work.

In our case, our main office is located in Amherst. Co-located with us is the Cumberland Development Corporation that lends money to small businesses; Nova Scotia Economic and Rural Development; Atlantic Canada Opportunities Agency; the Cumberland Career Resource Centre which is something we deliver on behalf of the province, formerly the federal government; the Amherst Area Chamber of Commerce; the Downtown Amherst Revitalization Society - probably about 10 to 12 partners in our building. For us, that makes it really good in terms of client service delivery.

In terms of the types of activities we get involved in, we're also one of those RDAs that has a dual focus. What that means is, we don't just do community development or we don't just do business development. If you're truly growing a community and you want to visualize where you're going to be and you're going to be sustainable and you're going to grow and develop for 50 years out - not the next time municipal governments are elected, but 50 years out - that's really how you should be thinking into the future. It's what happens after I'm dead and gone. If you're doing that properly, in terms of activity, you've got to look at all aspects.

The integrated community sustainability plan - if you look at it, for those of you who have some familiarization with municipal government, there are four pillars that are looked at: energy being one of them, economic development being another, social, and I believe cultural is the last one. All those aspects are really important in growing a community. What we tell our municipal units is, if you're trying to recruit young people or new families to an area, it's not just good enough that you have a new school, it's not good enough that you have a new hospital. You're competing globally with developed nations to try to not increase your population - right now, at best, it's sustain your population and address labour force needs, so you've got to approach all factors.

In our case we work in strategic planning, we work in business development, we work in community development, we work in human resource development. In human resource development, that runs the gamut - everything from career counselling right through to immigration and youth attraction. Communications marketing, infrastructure sites and premises - I believe that covers the six priority areas that we work in.

Accountability - obviously annual audits are part and parcel. The ISO registration is another key component of that. We present to our board every two months and that's circulated to all five municipal units, a detailed account of every activity we are involved in and the status of it at that point in time. If there's a problem with any one given project, the board is going to be made aware of it up front and the municipal units are going to know fairly quickly. If something is slow because we haven't received funding from whoever the partner is, they will be aware of it.

Other areas of accountability, because we handle so much project activity, we tend to - Joggins would probably be the one that most of you would be familiar with as a World

Heritage Site. When you handle a project that big, sometimes an HST auditor comes to call because all of a sudden your HST activity has changed. We have a really good financial officer. The poor HST auditor came in and went through the files; we had provided him with too much information. He was very impressed, which is a good thing, but that frequently happens within a regional development authority in terms of accountability.

We're also one of the RDAs that does, every two years, a third-party evaluation. This is not a mandated requirement for performance-based funding, it's something we choose to do. We retain an individual who does direct survey work, one-on-one contact with funding partners, with a random selection of business and community clients, with municipal units, with board members, to get feedback in terms of how we are performing, if we're relevant as an organization, if we're doing what we set out to do.

What that also does for us, above and beyond saying, okay, here are some problem areas, it gives us another level of feedback so we can look at our business plan and look at our five-year strategy which we reflect back on every year when we do our activities. It gives us the opportunity to say okay, are we doing the right thing? Are we the same organization we were a year ago? Do we need to change that? Do we need to adapt that and rethink how we're doing that activity?

What else can I tell you about our organization? Because of ISO and because of the nature of us wanting to monitor and evaluate everything we do and understanding the results that we're getting, we tend to audit and analyze every project, particularly large projects, individually. In fact, if you come to an event in Cumberland County, you're going to have a form to fill out when you're done because we need the feedback. Am I rambling too much?

MADAM CHAIRMAN: No.

MS. KELLY: We don't do everything for everyone. We also function from what's called project initiative criteria. So when someone comes to the door - and sometimes the projects are great and relevant, and sometimes they're not. Anything that we work on, whether we're going to go out and try to find money for the project or we're simply providing guidance and advice, has to adhere to these project criteria which means it has to make sense to a regional strategy, it's got to make sense to a municipal strategy.

[9:45 a.m.]

The group or organization that's doing it actually has to be a credible, registered group or organization. They've got to have a proven track record. If it's a project that they want to build something new, they've got to be able to demonstrate to our organization that they have the ability to manage it long term, that they are not going to be repeatedly coming back to the funding partners saying, okay, this year I need money to operate this activity. So

before anything even comes in our door, it has to be assessed within those criteria. I believe there are other RDAs that may look at that activity as well.

MADAM CHAIRMAN: Ms. Kelly, thank you and it's always very interesting the way a meeting plays out because if we get lots of information, sometimes you've answered all the questions before we get to pose the questions.

MS. KELLY: Yes, I tend to do that.

MADAM CHAIRMAN: So at this point what I'll do then, not to cut you short, but I'm sure we'll be able to get more information with questioning. I'll start a speakers list. What we'll do is try to keep to around five minutes and then we can see if we have enough time for round two. Would that be okay? We'll start with Mr. Colwell.

HON. KEITH COLWELL: Thank you very much. I have several questions around many issues and five minutes sure isn't long enough for this. I'm going to start with Mr. Conrad. Recently, on February 3^rd, I asked the Auditor General if he could audit the RDAs and his definitive answer was no. Is there any move afoot to give the Auditor General the opportunity and authority to do that?

MR. NEAL CONRAD: Unless there is a specifically identified problem concerned with the regional development authority, we believe that the audit requirements are met through the provision of their annual audited financial statements which we, in fact, do get every year. The minister certainly can, particularly for those RDAs that are incorporated under the Act, request that an audit be undertaken, but it's my understanding it would be undertaken on an individual basis.

We have been in contact in the past with the Auditor General's Office to determine whether or not the accountability framework we have put in place for the regional development authorities is, in fact, adequate. The last time that happened was approximately four years ago and they determined at that time that the accountability framework that we had in place was, in fact, adequate to ensure reasonable accountability for the expenditure of public funds.

MR. COLWELL: Going right to the South West Shore Development Authority, when was the audit started on that?

MR. NEAL CONRAD: The initial request for that audit was made to Internal Audit at the Department of Justice, in early January of the current fiscal year. An auditor has been retained and the audit will be completed by March 29^th. That's the date for completion.

MR. COLWELL: We see in the news that the Ombudsman's Office put a report together that indicated there were some possible irregularities. Why weren't these identified by the department prior to the Ombudsman getting involved in this?

MR. NEAL CONRAD: The activities that the Ombudsman specifically identified as possibly problematic and requiring further investigation are activities that normally fall outside of the core function of a regional development authority; they are on the edge of it. We would have no knowledge of what some of that activity would have been. Our activity and our accountability focuses on expenditures of core funding of that organization and project funding. In that sense, neither of those two areas were identified by the Ombudsman's Office as requiring further investigation.

MR. COLWELL: Who is conducting the audit?

MR. NEAL CONRAD: That audit is being conducted by Ernst & Young.

MR. COLWELL: And who is paying for the audit?

MR. NEAL CONRAD: The Department of Economic and Rural Development is paying for that audit.

MR. COLWELL: That begs to ask the question, if the department is paying for it and you just indicated that it's outside the normal activity that the Department of Economic and Rural Development would look into, why is the Department of Economic and Rural Development paying for this audit?

MR. NEAL CONRAD: Although it may fall outside of the core responsibility, we are very interested in what the general activity of the organization is. We respect that the key funders in the area - the municipal governments - do not necessarily have the capability to provide the additional funding of that level and it was a specific recommendation of the Ombudsman's Report to the department that the audit be undertaken. So we acted accordingly and we agreed that we would, in fact, cover the cost of that audit.

I think it's important, however, to note that the request for the audit was also made directly to the department by the board of the regional development authority, prior to the Ombudsman's Report becoming a public document.

MR. COLWELL: What other RDAs are currently being audited by the department?

MR. NEAL CONRAD: There are no other RDAs that are being audited in that same manner. As I said, we do receive third-party audited financial statements on an annual basis for every RDA in the province that receives core funding.

MR. COLWELL: Why would you go to an independent firm instead of the Auditor General for doing that?

MR. NEAL CONRAD: We worked through Internal Audit at the Department of Justice. It was their recommendation that we use a third-party firm based on their current workload, I believe.

MR. COLWELL: What other RDAs have been audited in the past and what were the results of those since the RDAs have been set up?

MR. NEAL CONRAD: This is the first time that we've actually been required to go in and complete an audit of this nature.

MR. COLWELL: I also see that based on what your funding is, the funding outside of any additional funding for the RDAs is around $6.5 million a year, is that correct?

MR. NEAL CONRAD: That would not be just provincial funding, that would be total amount of funding.

MR. COLWELL: No, I realize that. How many jobs do you create in a year with a $6.5 million investment?

MR. NEAL CONRAD: Specifically within the RDAs themselves or as a result of their activity?

MR. COLWELL: I would say not within the RDAs because I don't assume that that's a created job, I think that's an administrative job - outside the RDA - that they would create in the community?

MR. NEAL CONRAD: I don't have that information readily available, but I'm certain we could provide that to you, in terms of direct jobs.

MR. COLWELL: That's something to direct to the clerk, if you would, please.

MR. NEAL CONRAD: Absolutely.

MR. COLWELL: I think that's a very important question. This is a big investment every year and I know there's a lot more investment in this, as has already been indicated, than the $6.5 million - around $6.5 million. The idea of the RDAs originally, if I recall - and I was in government at the time - was to create employment in all parts of Nova Scotia. It shocks me that indeed you're not really tracking that. I think that's one of the key indicators.

I can recall when I was on regional council that when the RDA came in and made us a great report about what a wonderful job they were doing, I asked the question, how many jobs did you create? They didn't know either. After that, regional council made the requirement that they had to come forward with that and since then they've been merged into the Greater Halifax Partnership, which probably was a really good thing for HRM, because I think it was questionable whether we were getting value for our money in that situation.

MADAM CHAIRMAN: Thank you, Mr. Colwell. Mr. Smith.

MR. MAURICE SMITH: I guess my questions are perhaps a bit more vague or generic, but I kind of like the direction we're going here. Overall, how would you assess how business is going in the rural areas in terms of the development?

MR. NEAL CONRAD: Based on information that we've received principally through the Business Retention & Expansion program, which actually requires that qualified individuals, trained individuals interview individual businesses, I think we had a pretty good snapshot of what issues are affecting business in the province. It remains a struggle in many cases as the economic environment in the world - and we need to consider that we are in a global environment - is going through some turmoil, has gone through some turmoil right now. Businesses in the province are facing problems that they had not anticipated or had to deal with in the past. Particularly as the demographic of the province changes, the availability of quality, skilled labour is a problem now and it will continue to be a problem.

The whole issue around business succession planning is a substantial problem that businesses are dealing with. Many businesses that we come across, for example - although they may be very well-run businesses, they have never considered the opportunity or the possibility of succession planning.

Access to finance, access to capital will always show itself as being an issue for businesses to deal with, particularly at the lower end, at the small end. But if you dig into a problem like that, what often presents itself as an access-to-capital issue is really more about how prepared the business is to deal with the circumstances. Lack of business planning is often what the underpinning is for something that shows up as, we don't have enough money to deal with things, access to capital.

Those would be the major things that we do, in fact, need to deal with, but there also is a tendency, I think, in the business community in this province to undersell themselves, to not believe that we can compete internationally. That's where programs like our Supplier Development Program are so critical, to assist businesses to understand what it means to be competitive and why it matters that they are competitive and that we need to look outside of our own borders for growth. I think those would be the major things and those would be consistent, those would be the top three or four, and they may be in a different order from region to region.

Our Business Retention & Expansion program does allow us, actually, to complete a diagnostic regionally. So we can, in fact, and have identified specific issues that may be more appropriate in one region than another. We have taken measures to respond to some of those specific needs. Sometimes it's a question of educating business about what's available to them and other times it really is about customizing something to meet their specific needs.

MR. SMITH: I guess what I wanted to ask too - these decisions to get involved with a business, the business approaches the RDA. How is it determined which business is going to get the support and which isn't, that kind of thing?

MR. NEAL CONRAD: They can approach either the RDA or us directly, or any one of our funding partners. There are multiple ways and we tend to like to use the phrase "no wrong door in, no wrong way in." What is usually done is a diagnostic would be completed on that business and that would be shared by all potential partners. A specific or custom course of action would be developed for that individual business and that's really the way that it would, in fact, work. There may sometimes not be any specific program or assistance that meets that individual business' direct need.

MR. SMITH: So is the final decision made by the board of directors at the . . .

MR. NEAL CONRAD: At the RDA itself?

MR. SMITH: Yes.

MR. NEAL CONRAD: No, I don't - Rhonda could speak specifically to that. In our case, there would be very specific program criteria that we would, in fact, apply. That decision would be made through normal means. It would not be a decision that would be made by an RDA board of directors or anything like that.

MR. SMITH: Okay, thank you.

MADAM CHAIRMAN: Mr. Skabar.

MR. SKABAR: You mentioned earlier in your presentation that from the roughly $2 million of provincial funding, $11 million was generated, so I understand a good part of this would be a federal portion and a municipal portion. How much of this would be from community-based or just raised up through the community?

MR. NEAL CONRAD: On average, about 20 per cent of any projects that we support would come from community sources - real cash.

MR. SKABAR: So community sources, this would be someone - a capital investment, some of those . . .

MR. NEAL CONRAD: Well, this wouldn't apply to individual businesses, this would apply to community-based initiatives.

MR. SKABAR: The community-based initiatives, they'd get their share of funding how?

MR. NEAL CONRAD: Fundraising, different sources, whatever is available to them.

MR. SKABAR: So sort of a couple million bucks we're talking about, is just fundraised through communities and stuff like that?

MR. NEAL CONRAD: Yes, it is.

MR. SKABAR: What are some of the best examples of community involvement in a community-based project? I'm thinking like Pugwash here, Rhonda, but not necessarily that one, any other one.

MR. NEAL CONRAD: I'll suggest one and ask Rhonda to elaborate and that would be Joggins because it's not, in our sense - the creation of UNESCO Joggins, it's both a combination of local resources that went in initially, in this case from municipal sources. But I think what's really important in something like that is the longer-term commitment from the community to maintain and run that facility. Rhonda, would you like to choose another one if that's not the right one?

[10:00 a.m.]

MS. KELLY: No, Joggins is fine, that's an easy one to do.

In terms of Joggins, I guess there are two things to keep in mind in the actual development of the project that took 10 years - the level of community . . .

MR. SKABAR: Thanks for that, by the way, seriously.

MS. KELLY: It's a nice one; you're all been there, right? In terms of the development over 10 years, there was almost an extreme amount of community engagement.

MR. SKABAR: Too much.

MS. KELLY: No, no, in a good way but more than you'd normally see. Part and parcel of that was understanding and trying to help the community and us better understand

the magnitude of what a World Heritage Site would mean, what the job creation would mean within that community, how we were even going to find the staffing to run the facility.

So the community engagement and why I talk about it, leading up to UNESCO, when it was registered as a World Heritage Site, one of the things the World Heritage Committee cited in particular - I guess two things relevant to the community: (1) it was an outstanding example, one of the best examples and a model worldwide for community engagement in any sort of World Heritage Site - keep in mind World Heritage Sites are normally state-owned, they're not community-owned by a not-for-profit organization; and (2) in terms of the management of the facility and the long-term commitment to manage the facility, again noted at the UNESCO level and the World Heritage Committee as a model for proper community management and stewardship of a site.

So the level of engagement, the level of involvement and the resources committed by volunteers for that project were substantial and it's what made it work. It wouldn't have worked any other way. Does that help?

MR. SKABAR: Yes, it does. So after the ball got rolling, people just sort of walked in the door and said, I want to join the Joggins committee?

MS. KELLY: Sometimes, and sometimes you have those community meetings where people aren't so happy. Not everyone is going to agree with the direction a community is going in.

MR. SKABAR: Gosh, yes.

MS. KELLY: For the most part, with Joggins, I think in the early years it was convincing the community that what they had was worthwhile. You've all been in those communities where someone makes a suggestion that we could do this and they're sort of, I could never do that, that can't happen here. The best example I'll give you of that with Joggins is five years ago doing presentations in this province and in different parts of the country, talking about, oh yes, we can be a World Heritage Site and someone coming up at the end of the presentation and quietly going: I'm from Joggins, but don't tell anyone - they were embarrassed they were from Joggins and that could never happen in Joggins.

The year we're going for registration, you're doing presentations and their hands are going up in the audience: I'm from Joggins, this is what we have in our backyard. That counts for a lot.

MR. SKABAR: Thank you.

MADAM CHAIRMAN: Mr. d'Entremont.

HON. CHRISTOPHER D'ENTREMONT: Thank you very much, Madam Chairman. I want to start off, you know, I've got sort of two lines of questioning that I want to go at. One revolves around the issue of single-entry access to economic development activities and the challenge that we have in South West, for example, is that not everybody sits under the same roof.

I know in Rhonda's case, everybody seems to be in the one place and it's sort of people walk in. The problem we have in South West at this point is the fact that not all economic development activity happens in the same place. I'm just wondering, could that be a mandate of the province at some point, in order to get some of these things to happen?

MR. NEAL CONRAD: It certainly has been an objective of ours to do that. Where the opportunities have presented themselves, we have, in fact, co-located. The difficulty that we often run into is leases for organizations expire at different times and those kinds of things, so that does present an impediment.

We've engaged with the federal government, through an initiative of Treasury Board, called the integrated service delivery project. The objective of that project - it will be rolling out as a Web site now, it will be rolling out province-wide. There are multiple federal and provincial partners that have identified the same problem. This is an attempt to actually deal with the issue of seamless service delivery without the requirement to co-locate, where we actually can have assessments done, currently it's proposed, on a limited suite of business support initiatives that assessments can be done by multiple agencies and it will be accepted by those agencies as an assessment.

Now, that is one way to begin to deal with that. It may not be a perfect solution and I'm sure it won't be perfect when it initially rolls out but there has been a commitment from multiple federal and provincial departments and agencies. In our sense here, Labour and Workforce Development, Economic and Rural Development and Nova Scotia Business Inc. have all signed on and have all identified specific programs and initiatives that would fall into that basket - Enterprise Cape Breton Corporation has done the same thing. So that does present us with some hope but it will continue to be our objective to co-locate with economic development partners whenever the opportunity presents itself. We are looking for those opportunities - every time one of our leases expires, we, in fact, do go out, canvass our partners and determine their level of interest, I guess. We understand the value of it.

MR. D'ENTREMONT: We have a bit of a challenge in Yarmouth County, in the South West Shore area, not even going at the Ombudsman's Report or some of the stuff that's going around there. We have two problems - first, that's going on; and secondly, we don't have an economic development individual right now because we did have the retirement of Robert Maillet. We are lucky enough to have Calvin Butler - I think his name is - who is the NSBI representative who does co-locating. He does have an office at the regional SWSDA office.

In this realm of uncertainty right now with the cancellation of the ferry service, this is when we really need to have some extra help happening around Yarmouth. I'm just wondering if there have been discussions around that and maybe what your idea is to maybe fast-track the position or send someone down from somewhere else, in order to fill that void at this point.

MR. NEAL CONRAD: Thanks for the question. We are, in fact, proceeding through the normal channels with filling that position and there have been discussions inside our organization to identify somebody who may want to get in there quicker. We understand where the gap is and it's unfortunate, the timing is unfortunate. I'm not critical of anybody's desire to retire but we certainly understand the gap in service that exists in that end of the province right now.

MR. D'ENTREMONT: Thank you.

MADAM CHAIRMAN: Okay. Ms. Kent.

MS. BECKY KENT: Thank you very much. This has been very insightful, thank you, I appreciate hearing all this. My experience to date with them basically is the Halifax version, as well as having been on council. It's a large area to make sure that all community and project initiatives have due consideration. I know from an area of the riding, for example, Cole Harbour-Eastern Passage that, depending on the circumstances, is considered rural sometimes and then not rural - urban or suburban - other times and sometimes it can be difficult to make sure that you're getting your attention and a piece of the pie, et cetera.

I guess my question is, from our provincial department, from your department, what kinds of tools are we offering to assist community projects and initiatives? How do they link through the RDA? Are there ones outside of the RDA, so that there aren't community projects that are slipping through the cracks.

MR. NEAL CONRAD: Thank you very much for the question. With the exception of core funding for the RDAs, our regular programming is available to any community group that exists in the province, meets our criteria. They include assistance in planning, which would include an assessment of an organization's ability to fulfill its mandate. We call those operational reviews or structural reviews.

There also is assistance available from us to actually implement projects. We do have two full-time development officers who are members of our staff, who are assigned to work within HRM. If there are any community organizations or groups that would like to meet with those individuals, understand in more detail specifically what we can or cannot do, what assistance is available, we're available to meet with them to do that. There may very well be projects, I believe, that are falling through both in your area, but in other parts of HRM, simply because of the size of the area and also because of the multiple levels of services that

are available here in HRM, that may not be available in Parrsboro or Shelburne. So yes, we'd welcome the opportunity to discuss what the potentials may be with any community group or organization.

MS. KENT: Thank you. Because we're a funding resource for the RDAs - and this is my impression of what was presented - and from my experience on council, they are accountable, and that accountability and transparency is really funnelled through the municipalities.

MR. NEAL CONRAD: Yes.

MS. KENT: And the funding priorities or the way it's rolled out - the money that's doled out - or support is really according to the municipal unit's sets of priorities. How do we ensure that our government priorities, with the money that goes with it, is there a connection that when we give the money there is some sense and communication with what this government's priorities are? Because they're not always on the same page, let's face it.

MR. NEAL CONRAD: Yes, that would normally be done when their strategic plan is presented, completed, and that would be in that sort of five-year cycle kind of thing. But it also is applied when the organization requesting core funding submits their annual business plan. We look for a connection between their business plan and provincial priorities. ACOA would also look for a connection to federal priorities, as well, so that would happen.

I do recognize that in a large municipal unit there may very well be a number of projects that are too small or too focused in their outcomes to show up in a larger strategic plan for an area, and we do have assistance through a program called strategic funding initiatives that allows us to deal with those kinds of things. It's quite flexible funding in there, but that is a specific mechanism that allows us to deal with some of those things, for whatever the reason - generally it's because they're too focused, too locally-driven and too focused to show up in part of a larger strategic plan.

MS. KENT: Thank you.

MADAM CHAIRMAN: Mr. Theriault.

MR. HAROLD THERIAULT: Thank you, Madam Chairman, and thank you, Mr. Conrad and Ms. Kelly, for your presentation, it was a great presentation. I only have one question and I'm going to share my five minutes with my colleague, Mr. Colwell. I don't have a lot of questions . . .

MADAM CHAIRMAN: Mr. Theriault, I think we'll have time for a second round.

MR. THERIAULT: Okay. I want to speak about the RDA in Digby-Annapolis, just for a moment. The expectation for the RDA in Digby-Annapolis was always that the RDA was going to create new business and that brought the hopes of people up in that area a few years back. It changed thereafter a few years back and I'm not saying anything wrong about the RDA - they work hard, they work damn hard down there, but they seem to be working hard to save things. They're working hard to save the ferry boat, they're working hard to save the wharves, they're working hard to save tourism, they're trying to get roads built, they're trying to save buses from going down there. If they had been there a few years earlier, they would have tried to save the train, but they missed the train.

That's what our RDA is doing in Digby, working to save and it's ironic that the federal and provincial governments would look at closing things down and then give a group money to try to save it. Now, doesn't that sound a little bit like something's wrong there?

MR. D'ENTREMONT: That sounds familiar.

MR. THERIAULT: That's what they're doing. My question is, is this going on all around Nova Scotia?

MR. NEAL CONRAD: I take your point and I think there always is a requirement of a regional development authority to respond to the circumstances that they are, in fact, presented with. The Annapolis Digby Regional Development Authority is a fairly new one, it's sort of going through its first cycle.

MR. THERIAULT: But it's saving everything and they're not growing, they're just trying to save . . .

MR. NEAL CONRAD: It is, but I think that if we look at their new strategic plan, which I understand is being completed now, I believe that you'll see them focus more on growth as opposed to saving.

MR. THERIAULT: We thought that 10 years ago.

MR. NEAL CONRAD: I've gotten some comments around some specific initiatives that I believe will be incorporated in there, so I believe that we're going to see that begin to change.

No, it's not usual for regional development authorities to focus simply on saving things; however, when the infrastructure is changing, the economic environment is changing, it is not unusual for an RDA to be expected to react to that, whether it was the closure at Greenbrier or the ferry. It's an expectation generally put on that board that they will, in fact, respond to that in a reasonable way. Your point is well taken about, we can't continue to grow if we're going to focus solely on holding onto the past.

[10:15 a.m.]

MR. THERIAULT: Thank you.

MADAM CHAIRMAN: Mr. Colwell.

MR. COLWELL: Just a couple of things in that regard. The mandate of the RDAs - when they go through the process of developing their strategy and they work towards a goal in their communities, do they have a vision of what has to be changed in a community to really attract and hold business in the community?

MR. NEAL CONRAD: I believe they do and I believe they're getting better at it. I believe that the key diagnostic piece that's now available across the province to know that better is the Business Retention & Expansion program, I believe they're much better at that. I believe they moved towards a performance-based funding model, which includes specific, clear deliverables. They can demonstrate what that vision is and what the specific outcomes are. If anybody would like to look specifically what would constitute some of those specific deliverables, they are available. Many of the regional development authorities actually post those on-line, the mid-year reports with their business plan. I'd encourage anybody who is interested to go in and have a look at what some of their deliverables actually are.

MR. COLWELL: Do you have a list or do any of the RDAs have a list of actually what you need in the community to attract business? There are some basic things that you need.

MR. NEAL CONRAD: Yes, there are. The group that the RDAs have worked with to understand that better is the group called the North American association of site selectors. In their criteria there are approximately 150 or so variables that we know are recognized internationally and the RDAs know what is, in fact, needed to attract and retain businesses and people to communities. That's where the immigration piece would come in and a few other things like that.

I believe they do know, in fact, what is needed and that it goes well beyond cost of a unit of labour and taxes and certainly, an understanding of where the completeness of the community is. Rhonda was able to explain her two-part approach that recognizes both the economic and social imperatives in making a healthy community and I believe that's really what that's getting at.

MR. COLWELL: Could you provide us with that list of 100-some things that they recommend?

MR. NEAL CONRAD: We probably can do that, I don't think that would be a problem at all.

MR. COLWELL: Could you also provide us with a list of how many RDAs have actually implemented the 100-some initiatives toward creating an environment for business in Nova Scotia? There has to be a checklist against that 100-some things that should be done and I think each RDA should be able to supply that to us if they're doing their job properly.

MR. NEAL CONRAD: We will endeavour to do that. I just need to be clear that many of the activities that are identified as being requirements in attracting business falls outside the jurisdiction or mandate of a regional development authority. There may be some specific municipal issues on the regulatory side and there may be some issues that would be more appropriate for other provincial government departments or the federal government, as well, but we can certainly provide the information.

MR. COLWELL: I fully understand that and I expect that, but it would be nice to see what has been done by the RDAs, how they've been involved with the municipal, federal and provincial governments to make those things happen. Do I have your commitment that you will get that information from the RDAs?

MR. NEAL CONRAD: Yes you do, we will do that.

MR. COLWELL: I would appreciate that.

MADAM CHAIRMAN: Mr. Boudreau.

MR. JIM BOUDREAU: First of all, thank you very much for coming here today. One of the things that I'm very interested in is the model that has been referred to, that you're using in Cumberland in particular. I certainly like the direction and the attempts that are being made, I understand throughout the province, with regard to co-location. One of the biggest hindrances to economic development is that there needs to be some attempt to make it sort of one-stop shopping, for lack of a better term. I hear from my colleagues on the other side of the table that it's also a concern that they have and it certainly has been a concern of mine in the past. I'm very much encouraged by the activities that are happening right now.

I certainly would like to congratulate you, Ms. Kelly, on your efforts in Cumberland because since becoming an MLA, I've been looking at some of the projects and some of the things that have been done throughout the province. I think you and your organization are to be commended for being very proactive and visionary in many of the things that you've done. I think sometimes these things go unsaid and I think it's important to say them. I do hope that other RDAs will look at your model and I do believe we're moving in that direction because I think it is a sustainable model and I think it's a model that will bring benefits. I think your track record shows that so I do hope you stay for a longer period of time.

MS. KELLY: I'm not quite that seasoned yet. (Laughter)

MR. SMITH: There's room in the old boys' club for her.

MR. BOUDREAU: Yes, there's room in the old boys' club and keep the seasoning process going, I think it's good.

One of my concerns, obviously, with rural development, representing probably the largest - well, it is the largest constituency in Nova Scotia - is with regard to resources and mechanisms - I'll use that term because it was referred to here - that might be in place to help municipal governments or municipal units that are struggling and cannot meet the one-third funding that is inherent in your model right now. Can you talk to me and tell me a little bit about what are some of the mechanisms that are in place to help deal with that?

MR. NEAL CONRAD: Currently there is no specific mechanism now that allows us to deal with that. We certainly, however, are aware of the financial situations that municipal units are facing in the province. We are in regular contact with Service Nova Scotia and Municipal Relations, through their municipal advisers, to understand specifically what the circumstance is within those organizations.

Participation in a regional development authority is not mandated, it's not a requirement that every municipal government, in fact, participate. We know that some RDAs have continued to provide service in an area where a small municipal unit has been unable to participate because of the real financial burden that's being placed on them. But we currently have no provisions to drop below that one-third, one-third, one-third. However, in some cases we are aware where that hasn't been able to have happened, additional municipal units within the family have stepped up and provided the additional funds specifically to allow those other municipal units to participate in the RDA programming. Even though the municipal unit may not be participating in the RDA core funding program, our services are still available in that community and they will continue to be available in that community.

Participation in an RDA by a municipal unit does not in any way impact how our additional programming is, in fact, applied. We still are there and we still can apply that programming in those municipal units.

MR. BOUDREAU: I do understand that the department is involved in that process, but what I'm looking at, sort of, strategies that would relate to an entire area that might be under the auspices of the RDA. I guess my point is, maybe there needs to be some discussion around that concept, something can be put in place so that those units can at least participate in it. I do understand that some municipal units are doing that, but sometimes when you have poor, poorer and poorest, you may not happen to have that co-operation because the money may not be available.

MR. NEAL CONRAD: That's a very good point. That is a significant enough issue for us that I believe it is on the agenda for future discussion beginning with the Nova Scotia

Association of RDAs. I know we certainly have had that discussion at the staff level with Service Nova Scotia and Municipal Relations and it has been offered in the past, the potential, for example, of Service Nova Scotia and Municipal Relations providing some incremental funding to a municipal unit to specifically meet those requirements. I don't know if that's the right solution and there has been no agreement to that, but there has been some very serious thought put around some of those issues.

MR. BOUDREAU: I wonder if you could fill me in and maybe talk a little more about some of the examples that have taken place in rural communities. I'm sort of picking your brain a little bit to see if I can get some ideas that I can drag back - examples where there has been relatively good success with either the RDA or Economic and Rural Development itself. I'm wondering if you can give me some examples of things that have been very positive.

MR. NEAL CONRAD: Sure, I'll give you a couple. One of the most recent examples - and it still continues to evolve a little bit - is the creation of the Farmers' Market and the whole Creamery Square complex in Tatamagouche. This was identified as a need in that community, specifically to support the local agricultural and craft industry. There were a number of organizations that had identified problems with their existing facilities or something like that.

What we've done in Tatamagouche is, Scotsburn Dairy donated a property that had been the old Tatamagouche Creamery property to the community for their use, it was surplus to their needs, so they donated it to them. What we have in Tatamagouche right now is, we helped with the master plan for the community that identified this as an opportunity and we did some specific physical planning on the capital works side which will allow a new complex to be developed. It's being developed now in the community.

The model that is being used there involves the Farmers' Market, the craft and cultural community and the local heritage group. They all were organized in separate facilities and had usual maintenance problems with buildings and that sort of stuff and not being able to meet their new needs. What they have done is taken the old dairy complex, built a new facility specifically for the Farmers' Market, renovated the creamery itself to meet the needs of the Heritage Society and the cultural groups. There will be an exterior, an outside performance area actually built that's part of it. The complex isn't owned by any one of those organizations. The ownership model is kind of interesting in that it more closely follows a co-op model where there is a joint board of directors with each organization responsible for those specific elements of the property.

We know when an idea is a good idea, it's quite simple - when the community comes to us with their own money in their hand not asking for everything, we know it's a good idea. This complex when completed will cost in the vicinity of $740,000. The community, through those organizations, has committed to raise $100,000 for that and the rest of the funding will

be coming from federal, provincial and municipal sources. To me, that is one of the most fundamental tests of whether an idea is a good idea and that is when an organization can come to you with their commitment and their commitment isn't to the idea or to how big it could be, but with a reasonable plan that indicates there is financial sustainability and they've got some money at the table.

Another example of that - it's from awhile ago - down in Chris' area with the Sport Tuna Fishing Museum in Wedgeport where the community worked very hard and very quietly for a number of years to put that project on the table. A facility has been built and there are a number of other things in the community, including hiking trails that go along with it, the hub of activity on the wharf. I remember clearly when that group came to us looking for assistance, the chair of the committee's first action to me was to slide the bankbook across the table and they had $150,000 on deposit in the local credit union. That was their commitment. Their request to us was, we need a little help, that's really what it was.

[10:30 a.m.]

There are other examples in places like Whitney Pier, that the Cape Breton County Economic Development Authority has worked with to establish a business incubation centre, a community centre, using an old school, repurposing an old school. I think, though, one of the most interesting tricks to this thing is being able to assess when the community itself is, in fact, ready to accept that responsibility. Sometimes the answer isn't no - it's no, not now. There must be capacity built within that organization to allow it to accept the responsibility beyond building a building. I think oftentimes we focus on a physical asset as opposed to, how are we going to take care of it when it's gone or when the initial capital money is gone?

MADAM CHAIRMAN: All right, thank you, Mr. Conrad.

Before we go on to our last speaker in the first round - Mr. Bain - I'd just like to say that we have a half-hour. We've been so incredibly efficient so if there are more questions we'll go to a second round and we can keep three minutes and I'll start another speakers list. Mr. Bain.

MR. KEITH BAIN: Thank you, Madam Chairman, and thank you very much for being here this morning. Just a couple of short questions. The downturn in the economy that we experienced and still are experiencing, did the approach of RDAs change in any way to deal with the economic downturn?

MR. NEAL CONRAD: No way that was obvious to me. I think that is, in fact, fair to say. I think the reason for that would primarily be because our ability to influence an outcome is quite limited, in the global sense, and I believe that's probably why. I think the work that's being done through the Business Retention & Expansion program would have

pointed to some specific responses from individual businesses. I would say that holistically, I haven't seen a fundamental approach because the RDAs can't deal with credit, with international exchange rates, with commodity prices - that certainly is beyond what it is they can do. They can educate themselves, be aware and inform, but their ability to actually influence is limited in many ways. Rhonda, maybe you'd like to speak specifically to . . .

MS. KELLY: I see a little bit of difference in the type of client, or the type of request by a business client, in terms of looking at the potential to maybe diversify their product line because they're not selling as much to the U.S., or a little bit more in crisis because someone who is stretched to the limit, when you go into that economic downturn, if they're fairly maxed out from a credit perspective it becomes a little more creative. So we've seen an increase in that, but not in how we handle it. You just respond to it on an individual basis.

MR. BAIN: That's great to know and thank you. I guess, Rhonda, this one would be more to you and it's with issues like cross-border shopping in the Amherst area. How difficult does that make it to attract business for further economic development or does it become more of a "save what we have" thing, as Junior alluded to a little bit before?

MS. KELLY: Amherst, in particular, has had some good successes, in terms of competing with New Brunswick, to lure business into its industrial park. The cross-border thing works both ways. Where we do find challenges or where there could be potential challenges, we found challenges over the years, for example, with the payroll rebate program through NSBI, whereby your people on payroll couldn't be from New Brunswick. If you look at our labour-force area, it's southeastern New Brunswick. So that's a little bit of a challenge. There are some concerns locally with respect to the power deal in New Brunswick and the impact that could have on cost of operating a business and how much poaching may be done by the Caledonia Industrial Park into the Amherst Industrial Park.

Again, our proactive approach to deal with something like that is that two years ago, we started looking at alternate energy opportunities for the county and where we can do investments so when the day comes you're dealing with that situation, you have something to counteract it with. It's always interesting being on a border, whether it's Sunday shopping or gas or whatever.

From a municipal perspective, we also encourage them to keep in mind that it works both ways because, by example, a lot of our retail activity in Amherst is supported by New Brunswick, so you have to look at it carefully.

MR. BAIN: A two-way street. Thank you, Madam Chairman.

MADAM CHAIRMAN: We'll start our second round and we'll keep the questions to about three minutes and we'll see how far we go. Mr. Smith.

MR. SMITH: I guess it's just a couple of things. Mr. Conrad, I didn't know that we were going to get a chance to go back at this so this is good for me. When you were talking in your address, one of your accountability measures was, you had referred to it as ISO 9000. I have no idea what that is, so can you tell me a little bit about that?

The other thing I wanted to know is, you've mentioned something about a student employment program and I'd like to have more detail on that as well.

MR. NEAL CONRAD: Sure. ISO is an internationally recognized standard. In this specific case, it's applied - there are various ISO standards, some that apply specifically to manufacturing and some that are really a management certification or accreditation. The specific one that's suitable for RDAs is a management standard.

What it really does is there is a formal process where you actually - someone explained it very simply, he said you write down what you do and then you do what you write down, and on an annual basis you strive for continuous improvement within that system. There is, in fact, an audit associated with that, by an accredited ISO auditor, on an annual basis, I believe, that ensures that you are both compliant with the standards you have put in place and that you are making continual improvements through that system. It is an internationally recognized system.

MR. SMITH: And did you say that one of the RDAs is not involved in that? They all are involved but one, did you say?

MR. NEAL CONRAD: Greater Halifax Partnership is not currently involved in that.

MR. SMITH: Is that an optional thing?

MR. NEAL CONRAD: It's not an optional thing, it's a requirement of their funding that they have until April 1^st to be compliant with that.

MR. SMITH: Okay, so that's in addition to being incorporated.

MR. NEAL CONRAD: Yes, it is.

MR. SMITH: And then the student employment program?

MR. NEAL CONRAD: We have really two kinds of student employment programs; one is directed at the not-for-profit sector. Why is this department involved in student employment? It's quite simple. Our focus in student employment is to provide experience for post-secondary students in their field of study throughout the province.

We have two vehicles to do that. One is called the Student Career Skills Development Program; that is a summer program specifically directed at not-for-profits. We have two co-op development programs. These run year-round, according to season. These are private-sector programs directed at the private sector. The general co-op program is for any co-op student, any institution can send students into that program, including the community college co-op program can do that.

We have a research and development co-op employment program that specifically focuses on engineering sciences and mathematics, to keep those students, to give them their first work experience in Nova Scotia businesses. In both co-op programs it's a subsidy program. We provide $10 an hour for the regular co-op program and $15 an hour as a subsidy for the research and development program. Minimum hourly wage in the co-op program, I believe, is $12 an hour now and it's $20 in the research and development program.

The reason for those programs is that we knew students in our co-op programs were gaining work experience outside of Nova Scotia during their co-op terms and they were being offered jobs when they graduated. The principal reason for us getting involved was that the wages being able to be offered, independent of some support, were not competitive with the market those students were going into, so we developed both of those programs to meet those needs.

In the case of the co-op program, we work with the co-op coordinators at the universities and at the community college to ensure that the work that's being offered meets the academic requirements of those programs of study, so those are how they both work. The information on both of those is available on our Web site, all of the detail is there.

MR. SMITH: So that's not an RDA?

MR. NEAL CONRAD: No, it is not. The RDAs are engaged in the assessments, particularly with the Student Career Skills Development Program, the summer program. In many cases we are able to apply students to the priority areas that have been identified by the regional development authorities, so we use that also to support implementation of the strategic plans. I know we have students at Joggins, we have students at Cape Chignecto, in Rhonda's area, and that's not unusual at all.

MADAM CHAIRMAN: Mr. Colwell.

MR. COLWELL: You indicated in your earlier presentation that you have seven RDAs that were above target - their work - you have five that are on target and one below. What is the one below?

MR. NEAL CONRAD: The one that was below was Guysborough. We began a targeted intervention immediately after the mid-year review. We have, in fact, worked with them to bring their performance up to an acceptable level.

MR. COLWELL: What were they below in? How did you measure them?

MR. NEAL CONRAD: It was principally related to not what they were doing, but how they were presenting it. We believed that they were doing a better job than they were actually doing. The key performance indicators which is what we evaluate against, the eight key performance indicators, their mid-year reporting did not specifically address those key performance indicators in a significant way. We went back to them and asked for that to happen and they re-presented to us last week, I believe, and we gave them another chance.

We will continue to work with them over the next 12 months to ensure that this is not a hook and release, this is not go in and make an intervention and bring you up. We've made a commitment, both us and ACOA, to continue to work with that regional development authority and their board of directors and staff over the next year to ensure that they maintain a reasonable level of performance.

Each of the regional development authorities, at the end of the mid-year review, do receive a written report from us as to where their deficiencies may be, areas that need improvement and areas that we believe may stand as best practice. That's provided in writing to the regional development authorities and we do a formal debrief with the RDA, staff to staff, following mid-year evaluations.

MR. COLWELL: Could you provide us with those key indicators that you use?

MR. NEAL CONRAD: Yes, certainly.

MR. COLWELL: Could you also supply us with each of the 13 RDAs, how they measure up on those eight indicators?

MR. NEAL CONRAD: We will provide you with the comments that we provide to the board, absolutely.

MR. COLWELL: That would be great. Going back to the South West Shore Development Authority, there have been a lot questions recently raised about that. Do you feel that the province, for their share of the one-third that goes into all this which we always have to keep in place, is satisfied with the progress you are making through the audit and all of the other things that are happening with this particular RDA?

MR. NEAL CONRAD: I believe we're happy with the progress around our core funding, we're very confident that has been spent and accounted for as intended. Until we

actually see the results of the audit, it's at that point that we'll be able to determine what the next steps would be and what state the organization actually is in. We will take whatever action is appropriate once we receive that auditor's report on March 29^th.

MADAM CHAIRMAN: Thank you. Mr. Skabar.

MR. SKABAR: You mentioned that there are economic and social imperatives taken into consideration with any proposals. What kind of social imperatives are we talking about in particular and how are they assessed?

MR. NEAL CONRAD: Would you like to address that, Rhonda? I think you probably can give the best examples to support those.

MS. KELLY: Sure. We look at economic, we look at social, we look at attitudinal options and maybe the best example would be the Town of Amherst and their interest in doing an arts, culture and heritage strategy and what the potential outcomes are going to be of that, what it's going to be used for and how would it be used potentially to make the community a more viable place to work, live and do business. Does that help?

MR. SKABAR: I don't understand, actually. So Amherst is putting forward a proposal, so when it comes to the board you say okay . . .

MS. KELLY: It comes to the staff and I probably should have clarified at the beginning, it's a policy board of directors, it's not a management board of directors, so it would come through staff.

[10:45 a.m.]

MR. SKABAR: Okay, so the board of directors doesn't look at any proposals in particular then?

MS. KELLY: Let's take an easier example than a plan because that's a little more intangible. I'll go back to Joggins and when we looked at that project in assessing what the social impacts would potentially be.

One of the things we looked at in Joggins, when you looked at the demographics of the community, if you looked at the Nova Scotia average for what household income is received through government transfer payments, about five years ago when we were looking at serious funding to build a facility at the site, it would be about 16 per cent, government transfer payments. So whether it is EI or pension or it's whatever, if you looked at Joggins, their voting area was 40 per cent. So you look at the Joggins project and you say, okay, it's 40 per cent that obviously we need to see more job creation in the area to bring that amount

down because 40 per cent is a substantial amount of family income coming from government sources, it's incredibly high.

This year we'll see revised numbers in terms of what we're seeing for transfer payments now. I'm making the assumption that it is going to be reduced because you put 15 or 20 jobs in a community of that size, plus the spinoff activity that has come from that, those transfer payments overall should be reduced, it should be moving back toward the provincial average.

MR. SKABAR: So the social imperatives would be things like family income and where that income is coming from?

MS. KELLY: That would be one of the things to look at, yes.

MADAM CHAIRMAN: Thank you. Mr. Theriault.

MR. THERIAULT: Neal, I just wanted to clarify something. I wasn't complaining about the RDA in Digby-Annapolis. I was complaining that they were wasting most of their time trying to save things and thank God they're there, because they're helping us save them. I'm just saying that they shouldn't have to spend that much time trying to save things. You said something was going to change there or their program was going to change. Could you elaborate on that a bit?

MR. NEAL CONRAD: The original strategic plan that they operated with was really developed by municipal government and that was the underpinning of it. Right now, this year, they're completing their first strategic plan that actually reflects the new organization. I believe in their new strategic plan is where we're going to see them moving away from reaction and into some specific new opportunities, as a couple have been identified. They're working with other RDAs in the area on some of these which would be around the forest industry and the development of a wood pellet operation. There also is some clearly identified interest in the establishment of a centre for excellence around tidal power generation. This is the kind of stuff that I think is beyond the reaction clearly and the kind of stuff that they wish to drive.

I think there are others in there, as well, but I really encourage you when the strategic plan is finished to get a look at it or meet with them and discuss it, because I believe that there will be some things in there that will make a lot of people happy.

MR. THERIAULT: I think the tidal power thing around that area will be great in the future. I think we have a great future there. We could supply enough energy for all of this country in western Nova Scotia. Thank you.

MADAM CHAIRMAN: Mr. Boudreau.

MR. BOUDREAU: A sort of follow-up or supplementary to my earlier question with regard to collaboration with other agencies. Again, I'm looking for examples and ideas. In particular I'm looking at how do you collaborate and how do you work with other agencies in order to bring activity into areas, especially rural areas? You talked about working with the communities and gave me some examples of some of the community things. I'm just wondering with regard to agencies and so on.

MR. NEAL CONRAD: Our principal collaborator on the federal side would be the Atlantic Canada Opportunities Agency. In much the same way, we evaluate the regional development authorities, their strategic plan and their business plan and that sort of stuff. ACOA is a partner in that involvement with us so they're very much involved, they understand what the priorities are as well. When a business plan or strategic plan is put together, there will be specific projects that will be identified in there as being needed. One of the things that we will look for is other departments or agencies that have a legislative mandate or authority to work in those areas. For example, it's not unusual, as you can expect, that a number of tourism projects would be identified. We will work with the Department of Tourism, Culture and Heritage to ensure they understand, they're onside and they're also ready to participate.

There are a number of kind of go-to departments that we work with, and in your area the Department of Natural Resources on the mineral side would be one of those. But really the network does vary from project to project, depending on the jurisdiction. Our network in Cape Breton is different than it is on the mainland because Enterprise Cape Breton Corporation has different tools available than what they have on the mainland. We generally work very much in a team environment, whether we're co-located or not co-located.

We believe that we actually have an understanding of who does what in the province, to the point that we have developed a joint database inside the Department of Economic and Rural Development called CIMS, the community information management system. This database is principally shared with Service Nova Scotia and Municipal Relations; Tourism, Culture and Heritage; and the Office of Health Promotion and Protection. It's so we know who has made contact with a client on the same project, so apart from the individual connection there also is the electronic connection so we can understand who's dealing with what. When a client would contact us, we would normally go into that database to see if they have also contacted any other government department. If they have, we'll deal with that department. If they have not and we believe they should, we'll initiate that contact.

MR. BOUDREAU: If I may, what was the name of the program you were referring to?

MR. NEAL CONRAD: Our database?

MR. BOUDREAU: Yes.

MR. NEAL CONRAD: CIMS, community information management system. It can't cross into federal jurisdiction because of security provisions, but it is an online database secured by a password, so there is a reasonable degree of security inside each department around the specifics, protection of privacy, around each of the specifics of the activity. What we really want to know is, is there a live contact and who do we contact in that department around that particular initiative? Recently the Department of Agriculture has shown some interest in having access to that database as well.

MR. BOUDREAU: So that database then would allow you to see projects that are going, have been looked at, right across the province?

MR. NEAL CONRAD: Yes it does, within those departments.

MR. BOUDREAU: Thank you.

MADAM CHAIRMAN: Thank you so much. This has been really informative and we're really grateful to you both to come and talk to us and your very enthusiastic presentation, Ms. Kelly, was very inspiring.

MS. KELLY: I'm a little intense.

MADAM CHAIRMAN: No, you obviously love your work - I think it's wonderful. Thank you so much.

Our committee has just one bit of committee business, so after we thank you we'll continue and then we'll be out of here by 11:00 a.m. Thank you.

[10:53 a.m. The committee recessed.]

[10:55 a.m. The committee reconvened.]

MADAM CHAIRMAN: Just one more brief bit of business before we go. Actually our very first meeting which was December 8^th which was our organizational meeting, we talked about whether or not we would sit as a committee when the House sits. Last year in the Spring when Mr. Colwell was chairman, he asked the committee whether or not they wanted to sit and I'll do the same thing. What's our consensus? Do we want to not sit while the House is sitting? I'll listen to any motions. Does anyone have any ideas?

Last year, I can read that Mr. Samson made a motion ". . . that the committee not schedule any meetings . . . while the House of Assembly is in session, but should there be a request from any of the caucuses to meet to deal with a specific issue, that the chairman would consider scheduling a meeting following such a request." We could do something the same, or what's the committee's wish? Shall we just not sit or shall we sit? Opinions.

MS. KENT: I have a question for you. Were there any submissions or, I guess, witnesses or presentations scheduled that this would dramatically affect, that had some particular relevance coming up? I'm not a regular member of the committee so I don't want to . . .

MADAM CHAIRMAN: No, there's nothing dramatic, I don't believe.

MR. SMITH: Madam Chairman, was there any discussion around Mr. Samson's motion back when he made it? What was the consensus at that time?

MADAM CHAIRMAN: Everyone agreed that if something in particular came up that was of real importance to any of the caucuses, that the chairperson would consider meeting. Other than that, the committee would not meet while the House was sitting.

MR. SKABAR: That sounds good to me.

MADAM CHAIRMAN: Do we have consensus then? Okay. Well, thank you very much and look at that, we're done and have three minutes to spare. Well done, thank you for coming.

The meeting is adjourned.

[The committee adjourned at 10:57 a.m.]